FTSE flatlines despite boost for retail stocks as shop price inflation eased

28 November 2023, 17:24

Stock prices fall
Stock prices fall. Picture: PA

The FTSE 100 was down 5.46 points or 0.07% to close at 7,455.24

London’s FTSE 100 flatlined on Tuesday with more good news for shop price inflation and a rebound in oil prices failing to lift the index into the green.

It was a quieter session for stock markets while the pound hit a near-three month high against the US dollar.

The FTSE 100 was down 5.46 points or 0.07% to close at 7,455.24, despite retail stocks moving higher.

It came after shop price inflation eased for the sixth month in a row with retailers competing fiercely for customers ahead of Christmas, according to new figures from the British Retail Consortium (BRC)-NielsenIQ Shop Price Index.

The inflation level eased to 4.3% in November, down from 5.2% in October and the lowest rate since last June.

Meanwhile, Rolls-Royce surged to the top of the FTSE with shares up by around 6% after the engine-maker set out an ambitious new plan to boost its profits, including aims to cut costs by up to £500 million.

Rolls-Royce job losses
Rolls-Royce shares moved to the top of the FTSE 100 after the company set out a new plan to boost profits (Rolls-Royce/PA)

Michael Hewson, chief market analyst for CMC Markets UK, said: “We’ve seen another soft session for markets in Europe on the back of more light profit-taking as we ease closer to month end and what has been a strong month for stock markets.

“The FTSE 100 has struggled, slipping briefly to a two-week low, with weakness in the luxury sector acting as the main drag after HSBC cut its outlook on the sector due to concerns that demand is likely to be subdued for the next five to six months, with Burberry sliding back, along with the likes of LVMH, Hermes and Kering.

“On the plus side, Rolls-Royce shares have seen another decent uplift, rising to a four-year high, after the engineering business upgraded its expectations for full-year cash flow to £3.1 billion by 2027.”

Elsewhere in Europe, Germany’s Dax was up 0.16% while France’s Cac 40 was down 0.21%.

Over in the US, the S&P 500 started the day on stronger footing with the S&P 500 up 0.3% and Dow Jones up 0.5% by the time European markets closed.

The pound was up by 0.6% against the US dollar to 1.271, the highest level since early September.

The price of Brent crude oil surged by 2.56% to 82.03 US dollars per barrel.

In company news, easyJet said that it had made a pre-tax profit of £432 million, up from a loss of £208 million a year earlier. The business said that it would bring back its dividend for the first time since the Covid-19 pandemic.

By the end of the day in London shares had gained 4%.

Elsewhere Pets At Home reported a hit from teething problems at its new warehouse. But shares still rose 2.3% as it reported that the problems had abated, and revenue growth had “normalised”.

The business also maintained its outlook for the year.

The biggest risers on the FTSE 100 were Rolls-Royce, up 15.1p to 258.3p, Smurfit Kappa, up 84p to 2,790p, B&M European, up 13.8p to 564.6p, Endeavour Mining, up 38p to 1,798p, and Mondi, up 28p to 1,381p.

The biggest fallers on the FTSE 100 were Pearson, down 35.8p to 933.8p, Burberry, down 50p to 1454p, Prudential, down 23.4p to 885.4p, Entain, down 17.8p to 834.4p, and Phoenix Group, down 8.8p to 464.6p.

By Press Association